UK statistics agency warns jobs data quality will weaken after survey error

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UK jobs data quality warning

Highlights

Office for National Statistics mistakenly misassigned interviewers, resulting in 1,200 missing telephone interviews for the July labour market release.
July labour data will have reduced quality due to use of estimated values, likely dampening reported employment changes and complicating Bank of England rate decisions.
The error adds pressure on the ONS’s ongoing overhaul efforts as it operates both the old and transformed labour force surveys in parallel despite cost and complexity challenges.

Survey mistake affects July labour release

As reported by Financial Times, the Office for National Statistics says it accidentally assigned interviewers to the wrong survey and did not detect the mistake for several weeks. The error means about 1,200 telephone interviews that would otherwise have fed into next month’s labour market report were not completed.

James Benford, the ONS director-general for economic statistics, says the July figures will show “a level of reduced quality”, with a smaller impact on some later releases because missing data points will be replaced with estimated values. The agency is working to identify which households were not contacted between May 3 and mid-June and to measure how their absence could distort the results.

Benford says the use of estimates is likely to “artificially dampen” changes during the affected period. In practice, that makes it harder for policymakers to judge clearly whether unemployment is moving up or down.

Pressure on ONS overhaul and rate setting

The latest setback hits as the ONS tries to repair its labour force survey while also testing a transformed labour force survey designed to replace it. Benford says operating both surveys in parallel is costly and complex, even after an expansion of the field force that means the agency expects to collect as many responses to the LFS in July as it did before the pandemic.

He also acknowledges that the problem was not identified quickly enough and says the agency plans to learn from the mistake and strengthen its processes. Benford was appointed last June to help turn around the ONS after a series of errors tied to deeper cultural problems, which also contributed to the resignation of national statistician Sir Ian Diamond.

The ONS’s labour data is important for Bank of England interest rate decisions, and weaknesses in the survey have already created uncertainty for officials. A sharp fall in responses to the LFS led the agency to pause publication temporarily in 2023, and the central bank has since repeatedly highlighted uncertainty over jobs market trends as a challenge for setting rates.

Our earlier report on the shrinking availability of UK returnship programmes highlighted how fewer structured routes back into work are coinciding with rising long-term unemployment and a weaker hiring market. We noted that employers have become more cautious amid economic uncertainty, even as policymakers stress the need to bring more inactive people back into employment and many returners are willing to retrain, including for AI-related roles.

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